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Health plan facing audit by attorney general
Star Tribune: Newspaper of the Twin Cities
October 4, 2001
Author: Glenn Howatt; Staff Writer

HealthPartners said Wednesday that it is the subject of the latest health plan investigation launched by Minnesota Attorney General Mike Hatch.

Last week, Hatch released the results of his year-long examination of Allina Health System and Medica. That investigation uncovered spending on consultants, executive perks, travel and gifts that Hatch contended were inconsistent with the mission of nonprofits.

HealthPartners, which is also a nonprofit, said that Hatch won't find similar spending patterns at the Bloomington-based health plan.

"We don't expect any real difficulties with the audit," said George Halvorson, HealthPartners chief executive officer. "We've had a chance to review the findings from the most recent audit done by the attorney general's offices and we don't expect to see the same level or scope of issues for our plan."

Hatch, who said last year that he would be reviewing all three of Minnesota's large health plans, confirmed Wednesday through spokeswoman Leslie Sandberg that HealthPartners had been selected for a "compliance review."

Technically, Hatch's office is reviewing the companies for compliance under the state's nonprofit organization laws, as opposed to financial audits that are conducted by the state's insurance examiners.

HealthPartners has 660,000 members in its various health plans. Last year, the company lost $4.4 million, but those losses were offset by investment income that allowed it to post an overall gain of $8.5 million. Revenue was $1.3 billion.

The company is unique among Minnesota health plans because it owns many of the clinics that its members use. It employs more than 550 physicians at more than 20 clinics throughout the metro area, as well as dental and behavioral health clinics. It also owns Regions Hospital in St. Paul.

Medica does not own clinics but its former parent company, Allina, did. Hatch criticized the companies for transferring funds among the corporate entities as need arose. Medica and Allina now are in the process of splitting into separate firms.

On Wednesday, the Star Tribune reported that the St. Louis Park-based Choice Plus health plan has accused HealthPartners of using its market power to lure customers away.

Choice Plus said HealthPartners clinics were charging Choice Plus members high fees, while the HealthPartners health plans were attracting Choice Plus customers with low premiums. HealthPartners denied the allegations.

- Glenn Howatt is at
Section:  BUSINESS
Page:  01D
Copyright (c) 2001 Star Tribune: Newspaper of the Twin Cities